Enterprise Financial Services in Clayton, Mo., has agreed to acquire Jefferson County Bancshares in Festus, Mo.

The $3.7 billion-asset Enterprise will pay $130.6 million in cash and stock for Jefferson, holding company for the $935 million-asset Eagle Bank & Trust Co. of Missouri.

Jefferson shareholders will receive $85.39 in cash or 2.75 shares of Enterprise's common stock for each share of Jefferson common stock, according to a Tuesday news release. The final aggregate price will be 3.3 million shares of Enterprise common stock and $26.6 million in cash. The transaction is expected to close in early 2017.

The deal will be accretive to Enterprise's 2017 diluted earnings per share, excluding about $10 million in one-time charges. Enterprise estimated full-year 2018 earnings-per-share dilution of 19 cents. The transaction will produce tangible book value dilution of 3.6% per share, with an earn-back period of less than 3.25 years.

Enterprise expects to generate about $8 million in pretax cost savings, or 29.9% of Jefferson's 2015 noninterest expense. Enterprise anticipated that it will record a 4% credit mark for Jefferson's loan portfolio.

Eagle Bank has 13 branches, $670 million in loans and $763 million in deposits.

"Eagle's solid real estate loan portfolio will add further diversity to our [commercial and industrial] oriented loan book," Peter Benoist, chief executive at Enterprise, said in a news release Tuesday.

Michael Walsh, Jefferson's chairman and CEO, will join the board of Enterprise Bank & Trust and serve as chairman of its St. Louis region.

Sandler O'Neill and Reed Smith advised Enterprise. Keefe, Bruyette & Woods and Lewis Rice advised Jefferson.


Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.